Meta Ignites Fresh AI Optimism Across Technology Stocks

Meta’s AI Launch Lifts US Markets as Technology Stocks Rally

The latest artificial intelligence (AI) product launch from Meta Platforms helped US equities deliver another positive week despite ongoing concerns around inflation and higher interest rates. In recent weeks, sentiment across the AI value chain had been weighed down by comments from leading frontier model developers, including Anthropic and OpenAI, who argued that the pace of AI development was accelerating too quickly and warranted greater caution. Against that backdrop, the release of Meta's "Muse" AI agent sparked renewed optimism. Muse is designed as a more autonomous AI assistant, capable of completing increasingly complex tasks on behalf of users rather than simply responding to prompts. Early adoption was strong, with downloads reaching several million within little more than a week of launch. The positive reception helped reinforce confidence in the commercial opportunity surrounding next-generation AI applications, driving Meta's share price more than +10.0% higher over the week. The improvement in AI sentiment provided a meaningful boost to broader US markets. The Nasdaq advanced +2.1%, while the S&P 500 gained +1.2% (both in dollar terms). Technology and communication services were among the strongest-performing sectors, more than offsetting weakness across areas such as utilities and energy¹.

Elsewhere, equity market performance was somewhat more mixed. In Europe, the MSCI Europe ex UK Index advanced +0.8% (in euro terms) as improving sentiment towards the technology sector helped offset a more challenging macroeconomic backdrop. The FTSE 100 delivered a more modest gain of +0.3%, with the UK's limited exposure to technology and AI-related companies making it difficult for the market to keep pace with more growth-oriented peers. Across Asia, returns diverged. The Shanghai Composite declined -0.6% (in renminbi terms) during a holiday-shortened week, with strength amongst several AI-related names proving insufficient to offset weakness elsewhere in the market. In contrast, Japanese equities performed strongly. The Nikkei 225 gained +2.1% (in yen terms), despite trading taking place on only two days due to national holidays. Technology and semiconductor companies were once again among the primary drivers of performance, benefiting from the improving sentiment towards AI. Japanese banks also contributed positively as rising domestic bond yields supported expectations for improved earnings prospects across the sector.

Finally, commodity markets remained volatile despite relatively modest moves at the headline level. Brent crude rose +0.3% over the week to finish around $104 per barrel, although that masked significant swings in sentiment. Support came from renewed Houthi attacks on Saudi infrastructure and the associated concerns around energy security, while hopes that fresh negotiations between the US and Iran could lead to a diplomatic breakthrough helped temper further gains. Meanwhile, gold retreated -1.7% to $4,280 per ounce as investors adjusted to the prospect of higher interest rates for longer. Rising bond yields and firmer rate expectations reduced the appeal of non-incomegenerating assets, weighing on the precious metal despite the elevated level of geopolitical uncertainty.

¹ T. Rowe Price – Global Markets Weekly Update, 25/09/2026

Macro Data

Country	Indicator	Period	Actual	Forecast	Previous
UK	Flash Composite Purchasing Manager Index	September	51.70	52.00	52.50
US	Durable Goods Orders MoM	August	0.00%	-0.40%	1.10%
	Flash Composite Purchasing Manager Index	September	58.40	-	56.00
	New Home Sales Annually Adjusted Units	August	0.684m	0.615m	0.607m
Europe	Flash Composite Purchasing Manager Index	September	53.10	51.70	52.00
Japan	Flash Composite Purchasing Manager Index	September	52.50	-	53.50
China	N/A	-	-	-	-
Source: Refinitiv Workspace

In terms of macroeconomic data releases, last week was relatively quiet, with flash Purchasing Managers' Index (PMI) surveys from the UK, US, Europe and Japan among the few notable updates. Starting with the UK, the Composite PMI, which combines activity across the manufacturing and services sectors, fell -0.8 points to 51.7 during September². Both components remained in expansionary territory but pointed to a slower pace of growth compared with previous months. Despite the moderation, the survey still provided some encouragement. September marked the third consecutive month of expansion following the contractionary period that emerged in the aftermath of the Iran conflict earlier in the year, suggesting economic activity has continued to recover despite elevated energy prices and a more challenging global backdrop. One area that remains firmly on investors' radar is inflation, with businesses continuing to report meaningful cost and pricing pressures. Given the heightened sensitivity of central banks to any signs of inflation persistence, these indicators are likely to remain closely watched in the months ahead.

² S&P Global – UK Composite Purchasing Manager Index, September 2026

Sticking with the PMI theme, the US Composite PMI painted a notably stronger picture of economic activity. The index surged to 58.4 during the first three weeks of September³, an increase of more than two points from the previous month and the strongest reading since July 2021. It also marked the fourth consecutive month of accelerating growth, underlining the resilience of the US economy despite higher borrowing costs and growing geopolitical uncertainty. Similar to the UK survey, respondents reported a renewed increase in pricing pressures, driven in large part by higher fuel and transportation costs.

Turning to some of the other US economic releases, durable goods orders were broadly unchanged in August, following two consecutive months of growth⁴. Beneath the headline figure, however, there was a degree of divergence across sectors. Demand for nondefence aircraft weakened during the month, although this was largely offset by stronger orders for defence aircraft and related components, helping to keep overall activity stable. The figures suggest that business investment remains on a reasonable footing, although momentum has moderated compared with recent months. The housing market, meanwhile, delivered a more encouraging update. New home sales increased by +6.4% in August to an annualised rate of 684,000 units, comfortably exceeding expectations and reaching their strongest pace of the year despite the persistence of relatively high mortgage rates⁵. Supply conditions were broadly unchanged, with 483,000 new homes available for sale, equivalent to around 8.5 months of supply. The median sales price also edged higher to $393,700.

³ S&P Global – US Composite Purchasing Manager Index, September 2026
⁴ US Census Bureau - Manufacturers’ Shipments, Inventories, & Orders, August 2026
⁵ US Census Bureau - New Residential Sales, August 2026

Returning to last week's PMI surveys, the picture in Europe continued to improve. The Eurozone Composite PMI rose 1.1 points to 53.1 in September, marking a third consecutive month of expansion and reaching its highest level in more than three years⁶. The improvement was broad-based, with growth strengthening across both the manufacturing and services sectors, suggesting economic momentum remains on a firmer footing despite ongoing energy price and inflation concerns. At the country level, there were further encouraging signs. France returned to expansion for the first time in ten months, while Germany recorded its strongest productivity growth in a year.

⁶ S&P Global – Europe Composite Purchasing Manager Index, September 2026

There were no major data releases from China last week.

Day	Country	Measure	Period	Forecast	Previous
Monday	N/A	-	-	-	-
Tuesday	UK	Bank of England Money & Credit Report	August	-	-
Wednesday	China	Official Composite Manufacturing Purchasing Manager Index	September	-	49.50
	China	RatingDog Manufacturing Purchasing Manager Index	September	51.60	51.50
	China	RatingDog Services Purchasing Manager Index	September	-	51.40
	Japan	Retail Sales YoY	August	3.30%	4.00%
	UK	Revised GDP QoQ	Q2'26	0.40%	0.40%
	US	Revised GDP QoQ	Q2'26	1.50%	1.50%
Thursday	Europe	Unemployment Rate	August	6.40%	6.40%
Friday	Europe	Flash Consumer Price Index Inflation YoY	September	3.60%	3.20%
	Japan	Unemployment Rate	August	2.40%	2.40%
	US	Average Wages YoY	September	3.20%	3.10%
	US	Non-Farm Payrolls	September	84K	162K
	US	Unemployment Rate	September	4.10%	4.10%
Source: Refinitiv Workspace

SJP Approved: 28/09/2026

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